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Monday, September 10, 2012

Asian Water Scarcity Risked as Coal-Fired Power Embraced

An interesting article in Bloomberg on the strong connection between electricity generation and water usage. The selected quotation is from a section of the article titled "Investor Risk" - which seems applicable to both the risk investors take, and and the risk of having the investors investing in coal-fired generation.

“Power is a very good example of the risk investors can potentially face,” Giulio Boccaletti, a partner heading McKinsey’s water resource economics practice, said in an Aug. 30 interview. “A problem with water can leave you with a stranded asset.”China and India account for than 60 percent of the world’s coal-fired power plants on the drawing boards by 2035, capable of producing about 805 gigawatts. China’s alone will consume 82 billion cubic meters of water a year by 2030, second only to the nation’s farmers, McKinsey & Co. forecast.More than half of existing and planned power plants by the biggest publicly traded companies in India and Southeast Asia are in areas likely to face water shortages, according to the World Resources Institute in Washington, which maps water risks for industries. Little data is collected by companies or their investors on what that means for projects with a 40-year lifespan, the U.S.-based researcher said in a report.